COST OF HOUSE BUILDING

Press, Volume LXXXVI, Issue 26205, 31 August 1950, Page 3

COST OF HOUSE BUILDING

RISE OF 75 PER CENT. SINCE 1939 '

GREATER INCREASE IN OTHER WORK

An analysis of the cost of house building showed that the cost of an average house had increased by 75 per cent, between 1939 and 1950, the Commissioner of Works (Mr E. R. McKillop) said in a report attached to the Ministry of Works .statement presented to the House of Representatives yesterday. “In other fields of construction the rise in costs is even greater,” he said. “There are many ccntribjiting factors. Award rates of pay have risen by 40 to 50 per cent., and the acute shortage of labour over such a long period has introduced such competition for labour that the resulting actual rates of wages ftaid range very' much above these evels. Improved conditions of employment, including minimum wage payments, holiday pay, and travelling time, together with much overtime at penal rates, payment of board money and bonuses, have all made noticeable contributions to increased costs.

“There was also a serious shortage of skilled tradesmen in certain categories, producing bottlenecks in production, and all works had been slowed up because of the general shortage of labour, skilled and unskilled. Again, material costs increases varied considerably and ranged between 60 and 303 per cent, higher than pre-war. Material shortages had nullified pre-planning of work and caused loss of working time and longer contract periods, resulting in added capital charges and higher overhead costs.”

“Heavily Over-committed “It can be seen that* here, as in most other parts of the world, the. building and construction industry h?s been heavily over-committed dur ng the post-war years, resulting in much reduced competition when works are I put out to tender,” said Mr McKillop. I “There is no clear-cut solution to the i problem until the demand is more nearly equated to the building potential available. This will not take place while private people and commercial and industrial organisations have money to invest in housing and building projects, and an unsatisfied demand for these exists, and at the same time the State is endeavouring to overtake arrears of Government buildings and to provide for an expanding population. Some relief would no doubt be obtained by the selection from abroad of people in trades which are not fully manned in New Zealand, and from the increasing availability of materials. Recent information received from Great Britain shows that there housing costs are now two and a half times pre-war figures, while in the United States construction costs generally have been doubled.” The value of permits issued Jn 194950 for housing and housing additions was £26,560,664 (65.1 per cent.) and Tor other buildings and works £14,208,946 (34.9 per cent.). The totalvalue of applications deferred during the year was. £3,492,544. The corresponding figures for the previous financial year were £28,202,603 (71.3 per cent.), £11,354,619 (28.7 per cent.), and £5,554,077 respectively.